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Exact figures on Internet gambling revenue are not known because the sites are not permitted to operate within the United States and because most of the countries that do allow them to operate do not collect or report revenue statistics. According to David Stewart, in An Analysis of Internet Gambling and Its Policy Implications

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two-thirds of Internet gambling operations are located in small Caribbean and Central American countries that provide little or no government oversight of the industry.

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Many Internet gambling sites either do not pay taxes to their home countries or pay lower taxes than land-based gambling establishments. For example, Stewart notes that in March 2005 the tiny island of Antigua in the Caribbean was the headquarters for 536 gambling sites, the most of any country. The sites were only required to pay 3% of their gambling revenues (winnings after payout to customers) to the government of Antigua with a ceiling of $50,000 per month. Other popular locations included Central and South America, Canadian Native American reservations, and the British Isles.

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Unlike most land-based casinos, the vast majority of Internet gambling sites are operated by small, virtually unknown companies. A land-based casino costs several hundred million dollars to build and operate and requires hundreds of employees, whereas an online casino is set up and operated by a handful of people for an initial investment of a few million dollars. The relatively low setup and operating costs make the businesses extremely profitable and allow them to offer higher payoffs to winners than land-based casinos.

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The future of Internet gambling in the United States remains uncertain. Under the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 banks and credit card companies are committing a crime if they transfer Americans' money to Internet gambling sites. Though serious Internet gamblers will likely find ways of transferring funds to online casinos and card rooms, lawmakers hope the law will turn casual gamblers away. As of late 2006, many of the larger, publicly traded Internet gambling companies, such as PartyPoker, had stopped accepting American customers altogether to avoid any conflicts with the U.S. government. However, the legality of Internet gaming remains somewhat uncertain. The law does not resolve whether the horseracing industry or Native American tribes are exempt from the ban on online gambling.

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